This article discusses strata water valve insurance excess responsibility and when owners must cover maintenance and excess costs.
Question: In our building, owners need to check valves annually and replace them every two years at our cost. If we make an insurance claim, there is a $20,000 excess. Is this reasonable?
We own an apartment in a high-rise building in East Perth.
Previous to our purchase, the building experienced problems with water damage from burst water valves that control the hot and cold water coming into the apartment. Owners were advised to have their valves checked and replaced. Owners of valves that caused damage were informed they were liable for the cost.
We have now been advised that owners need to check valves annually and replace them every two years at our cost. If we make an insurance claim, there is a $20,000 excess.
How is this reasonable? Shouldn’t all internal pipework and valves be a building cost, not a cost to owners?
Answer: It’s important to understand the distinctions between “Responsibility to Insure” and “Responsibility to Maintain”.
It’s important to understand the distinctions between “Responsibility to Insure” and “Responsibility to Maintain,” which can often lead to confusion.
In this scenario, as the valves are considered permanent fixtures, they form part of the building structure. Consequently, the strata company is responsible for insuring them in accordance with the WA Strata Titles Act. However, if the valves form part of the lot, maintenance of these fixtures falls under the jurisdiction of the lot owners. This means that even though the strata company insures the valves, individual lot owners are responsible for their upkeep or for repairs in the event the damage is not covered by the policy.
Furthermore, in cases where damage arises due to a lack of maintenance or failure of these valves, the cost of repairs and any associated claims may be the responsibility of the lot owner, including any applicable excess.
It is advisable to review the strata plan and by-laws specific to your building for any provisions that might uniquely apply to your scenario. Consulting with your strata manager can also provide clarity and ensure you are fully informed about your responsibilities and rights as a lot owner.
This post appears in the June 2024 edition of The WA Strata Magazine.
Tyrone Shandiman
Strata Insurance Solutions
E: tshandiman@iaa.net.au
P: 1300 554 165
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.
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